Huntington Bancshares (HBAN) in Columbus, Ohio, will redeem roughly $114.3 million in trust-preferred securities next month.
Huntington is the latest banking company to announce plans to repurchase its trust-preferred securities as new capital standards will begin being phased in next year. Banks with at least $15 billion of assets at Dec. 31, 2009, will no longer be able to count trust-preferred securities as part of Tier 1 capital under a provision of the Dodd-Frank Act.
The redemptions will be funded with existing cash and are expected to result in a modest loss, the $57 billion-asset Huntington said Monday.
Other banks that said they would repay their trust-preferred securities include Fifth Third Bancorp (FITB), BB&T (BBT) and Bank of America (BAC). Industry observers expect the number of banks taking similar steps to rise in the coming months.